BMO Financial Group

BMO Financial Group

January 29, 2016 08:19 ET

BMO ETF Outlook Report: ETFs Are a Key Tool for Navigating Market Volatility

- Smart beta, fixed income and currency exposure continue to be key trends in the industry

- BMO's ETF business led the Canadian ETF industry in net new assets for the fifth consecutive year

- Canadian ETF industry assets are expected to reach $250 billion in AUM by 2021

TORONTO, ONTARIO--(Marketwired - Jan. 29, 2016) - BMO Global Asset Management (BMO GAM) today released its ETF Outlook Report for 2016. The report looks at key trends that contributed to the growth of the Exchange Traded Fund (ETF) market in 2015 and opportunities and challenges for the year ahead.

According to the report, 2015 was an historic year for the Canadian ETF industry with more than C$16.3 billion in inflows. Assets under management (AUM) reached just under C$90 billion - double the AUM of the industry five years ago.

The report noted that in Canada, equity ETFs accumulated C$9.7 billion in inflows and fixed income ETFs added C$6 billion in inflows. BMO GAM's ETF business led the Canadian ETF industry in net assets for the fifth consecutive year.*

"2015 was a record-breaking year for the domestic ETF industry," said Kevin Gopaul, Senior Vice President and Chief Investment Officer, BMO Global Asset Management. "This is particularly impressive given the turbulent markets we experienced. It's clear that investors continue to gravitate towards ETFs, both as core holdings and to position their portfolios strategically to address these periods of volatility."

The Effects of Market Volatility in 2015

The report also examined how ETFs are used to address market volatility as a key theme of 2015.

Advances in Smart Beta ETFs: Smart beta ETFs continue to grow in popularity, as they aid investors to navigate market turbulence. Low volatility ETFs invest in equity markets but with less exposure to market volatility. Multi-factor smart beta ETFs are new to the market, giving more choice to investors.

Fixed Income: Market volatility also impacts fixed income portfolios. Economic news can have divergent impacts-on short-term rates based on current conditions and on long-term rates based on future expectations. The ETF industry has evolved to offer precise portfolios, slicing the credit spectrum and segmenting by maturity.

Currency Effect: Another factor affecting portfolios has been the impact of currency returns. Canadian investors often prefer a hedged exposure; ETFs are now offering both hedged and unhedged listings.

The report concludes by noting that ETFs continue to grow in popularity, through smart beta and currency options, and will be a powerful tool to help reposition portfolios and to maneuver turbulent markets.

"We expect to see the ETF industry continue to grow in the years ahead. We project that by 2021, the global ETF market will double to more than US$6 trillion and the Canadian industry will grow even faster to reach C$250 billion," said Mr. Gopaul.

To view the full report or for more information about ETFs, please visit:

About BMO Exchange Traded Funds (ETFs)

Established in June 2009, BMO Financial Group's ETF business is a leading ETF provider in Canada. BMO ETFs provide Canadian investors with broader choices and greater access to an innovative portfolio of investment products.

About BMO Financial Group

Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of approximately $642 billion as of October 31, 2015, and close to 47,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.

*According to Bloomberg data

BMO ETFs are managed and administered by BMO Asset Management Inc., a portfolio manager and investment fund manager and separate legal entity from Bank of Montreal.

Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the prospectus before investing. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated.

BMO Global Asset Management is a brand name that comprises of BMO Asset Management Inc., BMO Investments Inc., BMO Asset Management Corp. and BMO's specialized investment management firms.

®"BMO (M-bar roundel symbol)" is a registered trade-mark of Bank of Montreal, used under licence.

Forward Looking Statements

Certain statements included in this news release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect", "intend", "will" and similar expressions to the extent they relate to the Fund, the Manager and/or the Advisor. The forward-looking statements are not historical facts but reflect the Fund's, the Manager's, and/or the Advisor's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although the Fund, the Manager, and/or the Advisor believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. The Fund, the Manager and/or the Advisor undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

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